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This article offers a monetary perspective on capital flows and the Eurozone's north-south divide. It argues that finance-centric narratives in comparative political economy rightly emphasize financial instability in the periphery, but that the role of capital flows therein requires clarification. The article draws on post-Keynesian monetary theory, coherent accounting, and balance-of-payments data to make three points. First, the focus on the financial account as a driver of current accounts should be abandoned in favor of an analysis of gross capital flows. Gross flows need not stem from excess savings in core countries and can be independent from trade flows. Second, explanations of financial instability in the periphery should go beyond bank flows and consider speculative portfolio flows into bond markets and foreign direct investment into real estate. Third, rising spreads in the periphery during the Eurozone crisis and the outbreak of the pandemic were not triggered by balance-of-payments problems but by a reversal of speculative bond flows. Comparative political economy should thus dedicate more attention to institutions that render peripheral countries susceptible to speculative flows into asset markets. [ABSTRACT FROM AUTHOR]

Masstige, or luxury for the masses, is a phenomenon that requires a heterodox economic approach based on Original Institutional Economics view of corporate power combined with Marxian concept of brand fetishism and post-Keynesian theories of pricing and consumer choice. The attitude toward luxury in classical works on political economy is briefly outlined. By applying the post-Keynesian theory of oligopolistic pricing, we show how the power of luxury brands enables high profits of luxury conglomerates. We use the post-Keynesian theory of consumer choice to differentiate between various types of masstige buyers. JEL Classification: B52, D11, D21, D43 [ABSTRACT FROM AUTHOR]

The global financial crisis and ensuing weak growth have increased interest in macroeconomic issues within comparative political economy (CPE). CPE, particularly the dominant Varieties of Capitalism approach, has based its analyses on mainstream economics, which limits analysis of the relation between distribution and growth and neglects the role finance plays in modern economies. It overstates the stability of the capitalist growth process and understates the potential effectiveness of government interventions. Baccaro and Pontusson have suggested a post-Keynesian (PK) theory of distribution and growth as an alternative. This article generalizes their point. PK theory highlights the instability of the growth process and lends itself to an analysis of income distribution and power relations. The article identifies the analysis of financialization and financial cycles, the understanding of neoliberal growth models, and the political economy of central banks as areas where PK economics provides specific insights for CPE. It also highlights that these arguments have important implications for government policy in an era of secular stagnation with ongoing social, distributional, and economic crises. [ABSTRACT FROM AUTHOR]

In this paper, we show that the economic crisis commencing in 2007 had different impacts across US Metropolitan Statistical Areas, and seek to understand why differences occurred. The hypothesis of interest is that differences in industrial structure are a cause of variations in response to the crisis. Our approach uses a state-of-the art dynamic spatial panel model to obtain counterfactual predictions of Metropolitan Statistical Area employment levels from 2008 to 2014. The counterfactual employment series are compared with actual employment paths in order to obtain Metropolitan Statistical Area-specific measures of crisis impact, which then are analysed with a view to testing the hypothesis that resilience to the crisis was dependent on Metropolitan Statistical Area industrial structure. [ABSTRACT FROM AUTHOR]

Rent seeking has once again become an important topic in economics. However, rent seeking poses challenges that standard economic theory is not well equipped to handle. This paper develops a working definition of rent seeking that can be applied to post-Keynesian growth models. The main finding is that, in a post-Keynesian framework, rent seeking will have an effect on income distribution and average productivity. In addition, increases in rent seeking can have undesirable effects on the distribution of talent. [ABSTRACT FROM AUTHOR]

The article reviews debates concerning financialization in South Korea, with a focus on ongoing arguments between liberal, post-Keynesian, institutionalist and Marxist economists. It argues that post-Keynesian and institutionalist perspectives in particular neglect important class processes through which the financial circuit operates within the Korean economy, especially the power of Korea’s large, family-led conglomerates, or chaebol. In order to build upon Marxist approaches to Korean finance, we argue that Nitzen and Bichler’s approach to the ‘capitalization’ of capitalist class power provides a useful heuristic for understanding the differential power of Korean chaebol and their integration into global capital. [ABSTRACT FROM AUTHOR]

This paper develops an analytical approach to comparative political economy that focuses on the relative importance of different components of aggregate demand—in the first instance, exports and household consumption—and dynamic relations among the “demand drivers” of growth. We illustrate this approach by comparing patterns of economic growth in Germany, Italy, Sweden, and the United Kingdom over the period 1994–2007. Our discussion emphasizes that export-led growth and consumption-led growth have different implications for distributive conflict. [ABSTRACT FROM AUTHOR]